In March this year, 45-year-old Prabhakar Khadagale, a vegetable vendor in Pune, woke up to a nightmare: his speech was gone. A doctor asked him to get a CT scan, which cost Rs 12,000. “We couldn’t afford it,” recollects Anusaya Gaikwad, Khadagale’s sister-in-law. What came to their rescue, partially, was the health insurance policy that Khadagale’s wife, Vijaya, had been buying for three years.

Run by Uplift India Association, a grouping of seven NGOs, and bought through the NGO Annapurna Parivar Vikas Samvardhan, the policy gave each of the four Khadagales health cover worth Rs 5,000 and concessional treatment at 90 hospitals and healthcare centres—for a modest annual premium of Rs 60 per person. So the CT scan cost the Khadagales Rs 1,200.

When Khadagale was diagnosed with cancer, the policy came in handy again. Says Gaikwad: “At the Deenanath Mangeshkar hospital, a biopsy costs Rs 69,000. We paid Rs 20,000, including a 15-day hospital stay. The policy and discounts have been a big help.” Though even Rs 20,000 is a hefty sum for the Khadagales, the policy helped them cut their losses.

The poor, everywhere, are looking to cut their losses. That’s the basic objective of insurance. Insurers have micro-insurance plans in health, personal accident, life and crop insurance, with a Rs 5,000-50,000 cover, but unfavourable economics and logistics are holding them back from going significantly beyond meeting their modest micro-insurance regulatory targets—2 per cent of premiums in the second year of operation and 5 per cent of premiums after the third year.

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